PANAMÁ

ACCOUNTING RECORDS FOR OFFSHORE CORPORATIONS

Casin & Asociados

BACKGROUND

The Panamanian Government has enacted Law number 52 dated

October 27th, requiring the "offshore" companies and private interest

foundations, which do not carry out operations with effects in the

Republic of Panama, to keep accounting records and maintain

documents confirming their activities as of January 1st 2017.

The documentation must be kept and be available for a period of five

(5) years at the legal entity's Registered Agent's office or in any other

place in the Republic of Panama or abroad.

Information will be confidential and may not be considered as public

information.

Casin & Asociados

BACKGROUND

The legal entity is obliged to provide the information to its Registered

Agent following the request received from the Dirección General de

Ingresos (DGI), within a period of fifteen (15) labor days, counted as of

the date on which the request of this information is notified.

In the event the legal entity does not provide the accounting records

and the support documentation, the Registered Agent is obliged to

present its resignation.

If the legal entity that does not appoint a Registered Agent within a

period of ninety (90) calendar days, will have its corporate rights

suspended.

Casin & Asociados

BACKGROUND

The non-compliance of these requirements will be sanctioned with a

fine of US$1,000.00 plus US$100.00 daily, counted as of the moment

this situation occurs until the moment it is corrected.

This requirement does not affect in any way the offshore operations of

these legal entities nor the way in which they operate.

They will not be obliged to fill in Income Tax, or pay taxes for offshore

operations.

Casin & Asociados

OTHER CONSIDERATIONS

The Public Registry will suspend the legal entity's corporate rights when it

has not completed the payment of its annual tax (TasaÚnica) for a period

of three (3) consecutive years.

While this suspension is in place, the legal entity may not:

• Initiate legal processes, carry out businesses or dispose of its assets;

• Present claims or exercise any right;

• Execute any binding corporate act;

After two (2) years without the legal entity's reactivation, the Panama

Public Registry will cancel its registration definitively and thus this legal

entity will be considered as dissolved definitively with all the legal effects

relating thereto.

Casin & Asociados

DEFINITIONS

ACCOUNTING RECORDS: information that clearly and precisely states the

legal entities' commercial operations, assets, passives and their patrimony,

allowing the validation of their financial status as well as the preparation of

financial statements for said legal entities.

SUPPORT DOCUMENTATION: include the contracts, titles, statements of

account, invoices, receipts or any other document that validates the

transactions and operations executed by a legal entity.